Mexico's November consumer confidence index jumped to a
seasonally-adjusted 94.9, after revised readings of 91.8 in
October, 91.1 in September, and 88.3 in August. The index is
now at its highest level since the summer of 2013. According
to the report, the rise in November came from increases in four of
the five subindexes. The subindex on consumers' willingness
to buy durable goods rose strongly for a third straight month,
reaching a 21-month high of 83.3. The subindex on consumers'
view of the current situation for their own family rose for a
fourth straight month, reaching a 15-month high of 100.3.
Meanwhile, the subindex on consumers' future expectations for their
own family rose modestly to 101.3, and the subindex on their future
expectations for the country as a whole rose to 92.7. In
contrast, the subindex on consumers' view of the current situation
for the country fell back slightly to 91.4.
The report was released today by INEGI, the official statistics
Comment: Mexico's consumer
confidence index is designed so that readings of 100 reflect the
level of optimism in 2013. The index had fallen sharply at
the beginning of the year, mostly because of new sales taxes that
took effect in January, but it has generally been trending upward
since then. The improvement has been particularly strong over
the last three months. By now, it is clear that Mexican
consumers have adjusted well to the new sales taxes. They are
probably also encouraged by the recent rebound in Mexican exports
and construction activity. Perhaps most important,
unemployment continues to decline gradually, and that could be
starting to push up wages. If hiring continues to improve and
wages keep rising, the improvement in confidence will boost
consumption spending and help support stronger economic growth.
Patrick Fearon, CFA
Vice President, Fund Management